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Mortgage approval rates are surging

The amount of mortgages approvals increased by a third last month. The vast majority was first-time buyers.

With mortgage approval rates increasing, we can expect property prices to keep rising.

The Banking and Payments Federation figures also showed the amount of the approvals is increasing.

A reason for rapid increase could be from Eoghan Murphy, the Housing Minister, reviewing the Help-to-Buy scheme. This review is a result of the Help-to-Buy scheme being accused of inflating house prices.

The increase of approvals does not mean an increase in mortgage drawdowns, as finding a home increases in difficulty. With the housing shortage, houses for sale have multiple offers so you have to outbid the others.

Forecasts predict mortgage lending to go up from €5.7 billion last year to €7.5 billion this year. Within the next three years it might even reach €13 billion.

Mortgage approvals were up from 3,046 last May to 4,124 this May. That makes a 35 percent increase in a year.

We can expect to see an increase of competition among mortgage lending banks with lower interest rates or offering incentives to try to win over the increase of potential buyers.

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